TMI Blog2007 (5) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... short as 'Tribunal') in ITA No.457/Del/1999 for the assessment year 1997-98. 2. The assessee is a Society registered under the Societies Registration Act as well as under Section 12-A of the Act. The assessee is having income mainly from the interest on fixed deposits and donations. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee has advanced huge amount to M/s Punj Lloyd Limited and as such he raised a query as to why Section 13(1)(c) read with Section 13(2)(a) of the Act be not invoked as no adequate interest has been charged on such amount, though that company was substantially interested in the trust. From the bank statements, the Assessing Officer found that as on 31 st March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s how the assessee is before this Court. 5. It has been contended on behalf of the assessee that under Section 11 of the Act, income of a trust held wholly for charitable or religious purpose is exempt. The assessee did not lend any amount to M/s. Punj Lloyd Ltd. during the course of commercial transactions and it had deposited the money with M/s. Punj Lloyd Ltd. as earnest money for purchase of land for a school and when the deal did not materalise, M/s. Punj Lloyd Ltd. returned the money and as such the assessee has been wrongly denied exemption under Section 11 and 12 of the Act. 6. The basic requirement for the availability for exemption under Section 11 and 12 of the Act is that if any money is lent to an interested party as de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act shall not operate so as to exclude the income of the trust from the total income of the previous year. According to Section 11 and 12 of the Act, the voluntary contribution made with specific direction that they shall form part of the corpus of the trust or institution, shall not be included in the total income of the previous year of the trust. But once the exemption under Section 11 and 12 is denied, the assessee would not get any protection from Section 11 and 12 and the voluntary contribution would be treated as income, as per definition of income give in Section 2(24) of the Act, according to which income includes the voluntary contribution receipts by a trust credited wholly or partly for charitable or religious purposes or by a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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